tv Squawk on the Street CNBC March 9, 2010 9:00am-11:00am EST
they're going to hold a web cam at 11:00 eastern promising, and our friend john chambers -- the announcement he say will forever change the internet. i looked at a three-year chart and it's indicated to be close to a new high. you have to go back to 2008 in may to get to these levels. >> i've never heard somebody say this is an announcement that will forever change the internet. yes, i'll be paying attention. how do you deliver on the promise like that? jim, thank you very much for joining us. we hope to see you back here real soon. >> looking forward to it. it's a great show, right? >> that's does it for us today. it's time for "squawk on the street." live from the financial capital of the world, this is "squawk on the street."
good morning, everybody. i'm mark haines. >> i'm erin burnette and it's good to be with you. front and center. it's been a year. >> has it been that long? amazing. >> it's been a year since the haines bottom, which was already fit and is now fit and ready to rock. >> told you, however, i'm going to step out on a limb here. >> this is the big -- hold on, everyone. >> i think we're at a bottom. i really do. i worked out rather well. >> you're going to see that sound bite a few times today, mark. >> yeah, i felt pretty strongly about that one. since that day, the dow is up a mere 61%, but it just gets better from there. the s&p up 68%. that's one of the best one-year runs ever. and don't forget the nasdaq, up 83%. a huge, huge day.
>> but, wouldn't you know it, on the big day that we've been planning for months, futures are low. but you know what, mark? futures have kind of been all over the map. and volatility readings are incredibly low, but the opens have been rather tepid, so lower futures may not mean a sad anniversary. >> all right. let's hit the markets. bob pisani's here at the big board with us. cool breeze. >> good morning. we've had this great rally. s&p's up 68%, but it's just harder to move things forword. look at texas instruments. this was a great mid quarter update. they're having trouble filling orders. stocks down 2%. texas instruments was $14 a year ago. it's $24 today. that's a big difference. look at dick's sporting goods. the guidance about in line with
expectations. dick was $11 a year ago. it's $25 today. it's more than doubled in a single year. look at ruby tuesday. it was $1 a year ago. it's $9 today. get the point? we've had such a great rally. bertha? >> john chambers is not one to be hyper and really hype things, so when he says he's got an announcement that's going to change the internet, you've got to believe him. cisco's the stock of the day. it's set to start at a new 21-month high. couple of others on the move this morning, we've got t voe last night posted a narrower loss ahead of the launch of the new boxes. siller is off. at jpmorgan, it is one of the
worst performers in the nasdaq 100. absolutely flat, trading right where it was a year ago today. but some of the biggest gainers, one was apple. apple yesterday putting in a fresh, all-time high of 163%. google, up 93%. microsoft, cisco, they just outpaced the nasdaq 100 overall. not the big leaders, but still up a handso 9% over one year. matt nesto? >> the fun thing we're going to watch, we're going to see the parody can hit the same price. they're at 80 and change right now. tried to kind of down play that economic strength story yesterday. we saw an up and down day with crude selling at the eight-week high, then this morning, we took a pretty strong charge to break
80. got as low as 80.16 in extended trade. we firmed up a little bit from that, but the price of oil clearly weak here today. same with heating oil, same with the gasoline. natural gas is trying to hang on to some gains here, but it's all about the dollar. let's get out to the cme and rick santelli. >> thank you very much, mr. nesto. if you look at interest rates, they moved a bit. especially on long maturities. a year ago, this was 96. 368 on the 10s was 286. think about the yield curve. it's now in the 280s. it was in the 190 camp a year ago, but the most amazing thing of all is it widened 100 basis points in three months following march of '09, so by june, pretty much the bulk of the move occurred today even though we had records deepening about a
month and a half ago. one thing that's changed over the last year is the humongous size we've offered on a biweekly basis. now, back to mark haines. >> i will take it briefly to give everyone an overview of what we're seeing overnight in asia. mixed trade, shanghai, hong kong and south korea were all higher. as for europe, we are lower across the board. in london, where ross westgate is standing by to talk about what's moving. hello, ross. >> got to remember, we were up yesterday on a fresh, 18-month high. we pulled back from that 5,600. just 0.06 lower. sterling's been weak. fitch is saying that the profile is deteriorating.
we also saw the trade deficit widen. we thought sterling would have helped to have narrowed but that wasn't the case. little negativity for the u.k. moodies investors saying if banks hasn't improved their financial position, they may suffer problems. the mining company today with disappointing earnings. that's down. just the defensive end of the market that's up. food and drink, health care and utilities. but of course, we've come a long way in a short period of time. mark, back to you. >> time to get the word on the street. in honor of the first anniversary of the haines bottom, we have a doubleheader for you. peter from empire executions. jonathan, both joining me here on the floor.
jonathan, what's going to happen now? >> you know, we've had a very strong year. >> yeah. >> the market has continued to move higher. we've had headlines that have been helping our market move higher, but it continues to see that the past two earnings seasons has helped us get to this level. psychologically, trading below the 10,000 and getting back up was important for the dow. we've had 1120 on the s&p. that's been a strong resistance level that has broken through. if we stay at these levels here, all these levels will lead to a continual upswing in this market. >> god. >> why is he wrong. >> it's not that i think he's wrong. i just think everyone has this overexcube rans abo the economy. >> what's the matter with them? >> i don't understand. there's 20 million people unemployeed. there's billions and trillions
of dollars in debt that the u.s. government's going to have to wade through. they're talking about extending out these -- selling more treasuries, going further out, 50 years because they want to take money out of the system. there's a lot of things wrong with the economy. i'm not buying a move -- we're at a very, very critical point. i think that the market is topping out. it's made a great move for a year from the mark haines/peter costa bottom, i did say two weeks after you did. i missed it by two weeks. >> i missed it by two minutes. >> okay. >> you got 15 seconds to rebut little mary sunshine here. >> there are other factors that peter mentioned, but getting through the earnings season and seeing the potential moving forward, that's going to help our market, yes. we have to continue to focus on
that. issues in europe and greece are going to affect our market, but overall, i think long-term, we're going to continue to trend higher. >> take that. >> he's a very smart man. >> jonathan and peter, thank you both very much. coming up, the "faber report." and if the markets can bounce back from 12-year lows, why can't consumers turn the corner? this is going to remind us about how the markets are still lower than they were a decade ago. i detest that reminder. we've got a new read on what is still lacking in the economic recovery and it's next. and one year ago, mark haines made that call. we want to know if you think we'll surpass dow 11,000. however, i'm going to step out on a limb here. >> this is the big, hold on, everyone. >> i think we're at a bottom. i really do.
accepted. a number of veteran risks, some are pulling back a bit. we'll get to that main a minute but let's get to news we're continue to watch. namely, novartis's fight. we're waiting to see if they change its bid for alcon. if you want history, you may remember they agreed to buy nestle's stake and then made a bid deemed by a lot of alcon shareholders, as not as nearly enough in terms of what it was. why am i talking about this? this morning, -- total cost,
$168 a share. but they had this ratio, 2.8 shares for each remaining alcon share, which gave an implied cost of about 11.2 billion. we're talking a lot of people investing saying they're going to pay a lot more than that. those are the potential talks i'm referring to. neither side has said anything publicly. they've hired their advisers and lawyers and are going to battle. this morning, novartis did file for a bond deal. what's interesting is that the bond offering, it's got maturities of 13, 15 and 20. the capital markets have been open for business for a while now, but they didn't disclose the size of the offering, which is leading some to believe that they want to leave it open because it may get bigger as a
result of them being willing to pay some cash for alcon, the part they won't already own, the public stub, so to speak. and some stock. and therefore, they don't want to put a number on it. we'll see if that speculation is right. you see alcon stock is trading above the novartis shares, but did want to bring your attention to that bond deal. it's an investment grade company. one other deal though that shows the side of m&a that people may want to keep in mind, especially given how tight things are trading, it's in the u.k. it's a waste management company, c carlyle indicated it would pay 135, but then came down. shanks getting shanked today. it is getting crushed.
rejects that cash over of 120 p and it's stock is sinking a lot. we don't know if we'll have it or not. they say carlyle's failed to offer a price which properly reflects the value of the company. that is a blood bath for the community. erin, back to you. >> thank you, mr. faber. we'll get new data on the consumer this morning. it says slow job growth stalling the recovery. amanda walker is with us now to talk about what statistics are you seeing that just show hesitation, i suppose, from consumers to spend. >> right. well, it is all about the employment index, as you say. our employment index as march is 48.7. that's flat from february. the good news is net job losses are down over the past 30 days, consumers tell us they've lost
fewer jobs. that's 6.0% from february where it's 5.7, but bad news is fewer say they're starting new jobs. 3.5. in september, it stood at 6.t2. we're seeing this growing trend of people not going back to work. >> we saw revolving credit last week. obviously, the increase was due to automobile purchasing. but we did see spending. we did seem to see a little more spending. is that just seeing it through rose-colored glasses? >> we asked about specific things they bought. basically, the retail index is flat. there was a slight gain in personal electronics spending and spending on major appliances. could have been the cash for clunkers for alliances coming through, but the future spending, when we ask about the next 30 days, that's at the
lowest since august of '09. they're not doing a lot of spending and we think it's part of that worry about the job picture. >> thank you very much, amanda, appreciate it. we have a major announcement coming up. that we are told will change the internet forever. will cisco live up to the hype it's creating? >> and the greeks are urging americans to crack down on hedge funds. finance minister who are blaming them for bringing them down. we'll be back. with fidelity, you can take your trading around the world, because now you can trade u.s. and foreign stocks online, in 12 markets, 24 hours a day, all from the same account, and settle in u.s. dollars or the local currency. plus, we'll guide you with international research and realtime quotes, so you can diversify your portfolio,
here's the check on the futures now. about four points below fair value. indicating a drop on the dow. the min ons are the same. kroger is reporting better than expected profits. revenue higher than expected. always reminds you the low margins in the grocery business. they work hard for their money. shares are up about 15% over the past year. >> shares of cisco up ahead of what we are told will be a big announcement. the company says it will change the internet forever. that coming via webcast at 11:00 a.m. eastern time.
the call will have it live. jim goldman is live in san jose. jim? >> mark, good morning to you. clear that throat. there's been a lot of speculation about just how big a deal this is going to be. everything from cisco planning to build out its on high speed broad band network to a wireless device. instead, i'm hearing cisco will unveil new equipment for its network service provider customers that will enable them to build high speed networks of their own. one source told me they have no interest in competing with its customers. it has every interest in enabling its customers. that's good news for nervous investors. and cisco's timing is particularly good. smart phones, net books, tablet pcs, there is an enormous interest and huge competition in
building out a faster network with download speeds faster than ever. the new devices today will alleviate the huge bottlenecks by ever-increasing video on the internet. >> it's a good analogy to look at cisco as the railroad of this century. this is where all the technology and all the traffic is coming through, so cisco's a great place to look. >> as cisco focuses more attention on mobile, its big acquisition last year becomes more important. jpmorgan has been all over this to overweight from neutral and slapping a new $28 target on these shares. the webcast begins at 11:00 a.m. eastern. so much discussion about google, cisco is saying, hey, guys, service providers, don't worry.
we got you covered. >> the final countdown right after the break. >> we're also focussing on financials and their role in the recovery. big banks, any safer than a year ago? every nasty thing that's going to happen is going to happen to big banks. and the greeks looking to raise cash. the finance minister coming up. we're back in two. whwhwhwhwhwhwh
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for big accounts... or small ones. that's the way it ought to be. time for fresh thinking. time for td ameritrade. we're back. here are your headlines. burger king blaming winter storms for hurting sales in january and february. in the u.s. and canada, burger king says sales were down 8.2% at stores open at least a year. merck and sanofi say they are combining businesses.
the joint venture will have 29% of the pet and livestock medicine market. and the eu warning the u.s. against protectionism. eads had partnered with drummond for a major project. >> let's bring in john brady. good morning to you, john. it's a anniversary. we're up 60%. so, what are you looking at today? >> well, you're right, erin, happy birthday to this one-year rally. trade was quiet yesterday and probably gets quiet the middle of the week. first of all, we continue to expect a short-term political solution to events in europe. maybe a little upside risk as year over year change store sales report strong.
an upside by, we will start lower this morning. investors are key to keep an eye on 11.40 in the s&p futures. that represents old highs from late january, early february. other than that, things are relatively quiet. should be well received. little concern maybe about tomorrow's ten and 30-year due to openings, but things remain quiet. >> all right. thank you very much. we appreciate it. perfect timing there. mark, you got your bells ringing. >> here they come. and here at the big board. vital voices global partnership celebrating international women's week in a launch of a global, corporate campaign entitled women can and women do. and at the nasdaq, celebrating the pr week annual awards.
>> and we are opened just barely lower than anticipated. let's check in with mr. pisani. >> a lot of the easy money has been made. if you're looking at what's going to matter, this year, some people have estimated of $80. you know how they're going to do it? financials. financials are going to have to have big, big earnings to get big increases in the s&p 500 over all, so citigroup, jpmorgan, all the big names have to do really well. there's citi just opening here at 356. bank of america was -- now, it's $16 essentially. get an idea of the increases in these companies. same with the rest of the market. we've moved forward so much, it's tough to move forward. texas instruments had a great
mid-quarter update. the stock's down 3% because it's not far from a 52-week high. dick's sporting goods had a good report over all. it's down 4% because the stock was $11 a year ago. it's $25 today. same with ruby tuesday. they had a good report. winter storms hurt them. ruby tuesday was a $1 a year ago. >> we're starting lower here on the nasdaq as well. cisco was a $14 and change stock. today, it's at 26.29. the intraday high yesterday was 26.36. the revolution will not be televised. cisco will make the announcement on the web at 11:00 a.m. goldman will be all over that and will have live headlines at 11:00. meantime this morning, that news from texas instruments, or the
disappointment of that weighing on chips, along with a downgrade this morning, it's off 6.5% on concerns of the digital tv penetration. intel from last year is up about 65%. apple is off of its fresh high yesterday of 220. trading down about 74 cents. that is one of the best gainers this morning. tivo is gaining ground. it said sales were weak because it was holding off on the box. meantime, cheesecake factory is off about 1.5%. germany has changed its reimbursement rate on solar panels and has cut the sector overall. along with ecd and evergreen l solar, they're starting off well to the downside.
mark? >> quick check on the markets for you. the dow down about ten points. the nasdaq off about three. beg your pardon. about four and a half. you're cnbc edge now. standard & poor's strategist and patrick becker. patri patrick, i'll start with you. we're up close to the top of our recent range. you think we can break through the top and fall back again? >> we think we can go higher. the biggest problem a lot of investors have is where do they go. do you go to real estate? that doesn't look like a play right now. do you go to fixed income? 3.5 on a ten-year doesn't look attractive. dividend paying stocks look attractive. we think you're going to see flows. why? when you look at returns, 50% or
more, asset allocation unfortunately chases the highest performance and stocks are going to look for the next year or two, like the best place to be and investors are going to come back to it. >> alec, what about you? >> i would agree we will make new highs on the s&p 500, but in the near term, it's going take more evidence to help us punch through the 11.50 level which is the high we hit on january 19th. we expect the market to keep churning around a while. we need more evidence to keep this recovery going as the governments around the world start to pull the stimulus away. last week's job report was a step in the right direction, but i think we need a bunch more of that including a very good first quarter earnings season. so, over the short-term, we're expecting more of a trading range. >> and patrick, dividends are
important to you? >> we just don't see interest rates getting away from us on the upside and as investors come back, they're going to be looking for income and those stocks are going to be a place to get that. >> and alec, you like cyclicals? >> absolutely. if we look at the performance off the bottom a year ago, not unusual in a new economic recovery to see the areas with the most leverage to improve profits do the best. we've seen leadership from areas like technology. we're also recommending an overweight to industrials, which is this year's best performing sector. and we're saying to stay away from staples, areas that just don't have a lot of earnings leverage to improve an economy. >> finally, patrick, you don't like, or you don't own commodities, but play xhcommodi oriented stocks like archer daniels. >> yeah, we like bun gee and archer daniels, that participate in that complex, but don't have
what gold and the other plays have. >> thank you very much. erin? >> we want to bring in elise nelson, president and ceo of the vital voices partnership and danielle, who is chairman of the haiti chapter. they're here to kick off a global campaign. women can and do, of course it is international women's week and we appreciate you being with us. elise, we saw earlier this week, women are often u not paid as much as men and not integrated into the economy in ways that can hugely benefit the economy. >> that's true and it's a real honor to be here. one of the things that we believe in strongly is that one of the only ways we can improve our world is to truly invest in
women. around the world, women's voices are not being represented. what we've seen here today at the new york stock exchange, which was wildly exciting, was to launch our women can do campaign, to really tell the stories of how investing in women can make a difference in our world. one of the great stories we're telling is that of the former minister of commerce in haiti. she is head of the vital voices chapter there. one of the things she believes in so strongly is the fact that women have got to be critically central to the reconstruction effort in haiti. in times of crisis, women are the victims, but they also offer very tangible solutions. >> is that going to happen in haiti? it's one thing to say and hope for, but another to come out on the other side with women and a much more significant, economic voice. >> yes, reenforcing, we have to
move forward. and women is to be at the center of this reconstruction because now, 80% of the economy was in port-au-prince and women now, have to be in the rural area, investing in coffee, cocoa, mango, textile. after all this, i'm really thanking america because thousand of volunteers have been in the field supporting our people, supporting them morally, economically, financially. praying for us. i thank america, but we have to realize, we are next door. one-half hour from miami. it's time, it's the moment for haiti. it's the moment for some business in haiti and american investment can make a difference in this country. >> all right, well thank you very much. we appreciate it and con
take a look at crude oil and gold. since the march market bottom, we've got crude up 72%. gold up 21%. so crude as you can see, vastly up facing the commodities across the world have been higher and that brings us to sharon epperson who's at the cambridge energy research conference in houston, texas. anyone who's anyone in energy is there and that's why sharon's there. good morning. >> you're right. anyone who is anyone is here at the conference in houston today. we have 2200 people attending from 55 different countries. it's focus is on energy and with
ceos today starting with the saudi ceo kicking it off. and conoco phillips ceo will be here as well. keep many mind, we have the energy secretary here to talk about energy policy. everyone is focused on what is going to happen to the price of crude oil and as you can see, when you look at the chart of oil versus the stock market, oil has far outpaced the stock market's gains of about 70% in that period of time. a lot has changed here. talking this morning to the chairman about what has happened, it seemed like a year ago the road was about to end. there's certainly a lot more confidence in the oil market today. >> oil price today reflects not just the conditions of the economy today, but very much expectations about a global, economic growth.
>> and that global economic growth, a lot of that is hinging on what is happening to china. both energy demand and economic growth coming out of china. that will be a major theme discussed today. we're also going to hear a lot about natural gas. yes, this is oil day here, but a number of of the companies including the ceo of italy's largest oil company will be talking about natural gas, so it's interesting as we're here and looking at how the price of crude has skyrocketed and the major oil companies are also looking at the opportunities they have for getting unconventional natural gas. back to you. >> thank you very much. we want to bring your attention to stocks on the move starting with yum brands. $44 from 38.
citigroup raises the price target on aadobe systems to 42 from 39. they maintain a buy rate. and apple after hitting an all-time high yesterday, anal t analysts raised the price to 284 and maintained their buy rating. one year ago, we hit the bottom and haines called it on the nose. now, why in the world would we write a script linking noses and bottoms? never a good thing. let's keep going. >> however, i'm going step out on a limb here. >> this is the big -- hold on, everyone. >> i think we're at a bottom. i really do. all right. >> since that day, the financials as best performer sector, up 150%. david katz and david peterson.
david katz, financials have outperformed. will they do so going forward and will there be a great divide? >> we think financials will continue to do well. it's important to put it into perspecti perspective. la last march, the system was valuing can banking system. you've had this very sharp gain. from here, we're expecting improvements over the next year as we think stocks are still undervalued and can do better, but more normal returns. >> david, is there a place within financials so get returns that trounce the market from here on? >> yeah, absolutely. in fact, in the first two months of this year, financials are outperforming the market. believe they're the third best performing sector. you still have, as the other guest said, massive und
undervaluation here. huge names that are still trading below. bank of america, for example, is trading at .7 times its book value. it should be probably trading at something like where wells fargo is. so, there's plenty of room for some of these names to do just as well as they've done in prior months. >> david katz, you like financials, but not regional banks? >> we think they have a lot of commercial real estate that has to be written down. bank of america, jpmorgan have already taken their hits. we're more confident that the big banks and brokers are poised to do better sooner. >> and david steeper son, you like big banks, too? >> all these banks --
>> bac is up over 400% in the past year. how much more is in a stock that's already up 400%? >> the issue isn't where it's been, but where it's going. even after being up 400% is only at .7 times its book value. it's got plenty of room to run. they're improving steadily each quarter. i think it's a mid-30 stock. >> all right, thanks very much. we appreciate it. >> thank you. >> thank you. next -- growth versus value. age old debate. i mean, been that way for centuries. and which will lead to higher gains? >> i guess in some ways, it has been that way for centuries, just measured in different ways. this is "squawk on the street." the market is now back higher. up about three points in honor of the anniversary. >> however, i'm going to step
and this morning, merck and sanofi are combining businesses. including carlyle group, general atlantic. burger king says its results in january and february were hurt by winter storms. sales fell 8.2% in those two months. over 75% of the company's restaurants are located in central and eastern parts of the u.s. and that of course is where the biggest winter storms hit. so far this year, the rus 1,000 starting off on equal ground. so, what happens now? growth or value. the next year. kent croft, bill, portfolio
manager, small cap growth fund. from the names of these funds, i'm thinking maybe the battle lines have been drawn. bill, make the case for growth. >> i like this thing that you think we've reached the bottom and are going higher. we agree with you. 2009 was all about streamlining op rags and getting earnings with stagnant top lines. if you think the gains we saw with efficiencies is going to be accelerated by topline growth, then i think you want to be with the companies that are grow the topline industries. you're going to see the best earnings from the companies that can manager those margins. >> value's been kind of left in the dust here. >> well, we think it's sort of
all the the time to be a valued investor. the way we look at it is, are we finding things today at these valuations that we'll feel comfortable owning the next three to five years. the answer is yes. i do agree with the other guest that large, multinational corporations, some of the more growthier names, last year, did not perform as well. lot of the names that were really leveraged to the economic turnaround bounced back first. we're seeing value also in some of those names, even cisco last year or baxter, typically maybe more value-oriented. >> also having growth. you're actually seeing the same names on both characteristics. >> i think the lines are blurred, but i also think it's the time where you need to be diversi diversified.
you need leverage to continue a global rebound as well as some of the steadier names that are selling at valuations you haven't seen in many years. >> bill, what defines growth to you? growing top line quickly, what is that? 10% more? >> it depends by industry, but i do think you can identify those companies growing organically. you have a bevy of women's apparel companies that are seeing square footage reductions as opposed to a j. crew or true religion where you're seeing top line growth compared with square footage growth. i would also agree with the other guests that valuations are reasonable. so, we're you're a value or growth investor, i think you can find what you want, but from our
perspecti perspective, differentiation between those companies through u top line growth. >> all right. thank you very much. appreciate your time. and next, australia and canada are among the top developed markets bouncing back from the bottom. >> built up over 50% from last year. coming up, australia and canada go head to head in trading the globe. ♪ national car rental knows i'm picky.
gainer. jpmorgan and merck the big losers. ual up 7%. carrier said traffic rose in february. visa, union pacific hitting fresh, 52-week highs this morning. now, erin and bob down on the floor. >> and we are here, mark, and we're actually talking about that conversation we had with the davids a moment ago about financials. you're saying that is simply the key to the entire market rally. >> people who have $80 estimates on the s&p 500, the total amount they might earn and most is predicated on the idea that financials are going to dra m dramatically outperform. in other words, the key to understanding earnings is financials had better do better this year. bank of america lost what, i think 29 cents in 2009. not a very good year at all for them. they're expected to make 82 cents a year. they're supposed to have a
notable turnaround and make almost $2. analysts have almost $2 for 2011. the point is, the expectations are very, very high for financial companies to out perform. i pointed out texas instruments had an amazing report. they can't fulfill the orders, they're doing so well. inventories are really lean. stock was down throughout the morning and the stock went from 14 to $24 in the last year. the same with these financials. bank of america, $3. this day, a year ago, three in change. remember the panic that was there? we don't have that now. we've had the rally and it's tougher now, so don't get frustrated. people aren't sure how much they're going to move forward. >> you mentioned texas instruments which trades here,
but tech today is the per view of bertha coombs and what else do you see? ynk we're talking about cisco, too? >> we're on the eve of the ten-year anniversary of the peak of the nasdaq, so one year from the march lows, we are up 83%. ten years from that absolutely peak, we're up about 50%, but in the old days, it was when cisco spoke, everyone listened and it's kind of like that today. we're looking for that announcement coming up in the next hour or so. and cisco is certainly raised the bar by saying they are going to talk about something that is going to change the binternet. internet players are fairly strong, just losing a little ground. apple, amazon and ebay holding in, but take a look at the best perfo performers over the last year. all but one was positive year
over year. erin, back to you. >> thanks to you, bertha. crude trade, we're a little off the lows we hit earlier in the session. down nearly a dollar. matt nesto is at the merck with the energy trade. >> i'm also looking at the ice exchange traded contract which is going to be a hair lower. it is below $80. wasn't able to hold that and has slipped below. 79 of 58 it looks like. the nymex crude, it took a run at 80 and held at 80.16 and has firmed up. the economic debate rages on as strong as ever here, but we will also be looking at inventory data coming out at 4:30 eastern time this afternoon and tomorrow
morning, 10:30, we get the weekly energy department data and look for crude supplies to build again. what's key is is the fact that natural gas is trying to find a bottom here. it's rising along with gold to heating oil to the gasoline and the crude. let's get out to rick santelli now in chicago. >> thank you, mr. nesto. you know, the you think about stocks a year ago, that's a layup. we know they're dramatically higher. 60%. if you look at other components of the economy, you can see huge changes and they're intuitive, but one that's not, everybody i've asked, and these are traders. a year ago, was the dollar index higher, unchanged or lower and almost everybody said lower. but how much lower? it wasn't lower. it was 9.3% higher. the dollar index was dramatically higher and i think that many people look at what's going on with the dollar and
talk about price inflation and commodities and lose sight of the fact that we really lost a lot of ground when we had to lower rates and come up with a lot of programs to try to save the economy. it's rebounded and that's dwarfed by its year over year comparison. mark, back to you. >> it has been one year since the haines bottom. >> however, i'm going to step out on a limb here. >> this is the big -- hold on, everyone. waiting for this. >> i think we're at a bottom. i really do. >> okay, or that time, office depot has been one of the best performers while game stop has been one of the worst. here to tell us about it is david strauser and edward williams. david, start with you on office depot. >> it's had a great move.
now, it's at a point where they have to prove the move is justified. last year, they got a big chunk of money, about $350 million, when they were struggling. they have a very tough balance. they have to be able to spend that money and keep their balance sheets strong to keep vendors, to make sure the vendors are okay with that. they're investing, the stores are looking better, but they probably need to still invest nor at a time when they need to keep the balance sheet pretty strong. >> your estimate of fair value for the stock is $7, which is pretty much where it is. >> yes. i agree. i think that now it's the burden of proof is on the company to show some improvement. last week's staples, that industry is a later cycle industry. they have a lot of exposure in europe. europe i think is going to come back slower because of a lot of issues there.
i just think for the time being, we've seen the bulk of the performance in the stock. >> edward, which is making game stop? >> i think there are a few issues affecting the stock. basically, if you look at, looking at counter 2009, the video game industry was lot weaker than people thought, principally due to music and casual genera. it started to get a lot more competition in the used games business. additionally, you've got kind of a constant macro issue hanging over their head over what rate and when will games become available by internet streaming. >> you're making the point that just because something is down or on sale, doesn't mean it's a good buy. you're still not a buyer. >> i'm looking for a few things.
i'd like to get some clarity on how they position themselves in a downloadable market. and also some idea as to when we can get improving sentiment around video game sales. it may come this spring on the sentiment side of it, but we need to get more comfortable with the short-term fundamentals. >> edwards is there a name you would buy in the gaming industry? one that is a buy or no. >> i think activision is in a strong position. they have had great success with franchise and world of war craft. as we look into 2010 and beyond, we'll see the blizzard component start to drive a lot more of the revenue and profitability. blizzard is a much higher contribution. >> thanks very much to both of you, we appreciate it. >> thank you. one year out from the
bottom, do you think we'll surpass 11,000 on the dow sometime this year and 1, 200 on the s&p? you can vote. the greek prime minister meeting with president obama today at the white house. he says the u.s. cannot afford to ignore the financial issues facing greece and the euro and he recently compared currency speculators to arsists. maria bartiromo talking to him. >> we're talking to him about how he is trying to reassure reinvestors. giorgos papaconstantinou is joining us live. can you talk with us about your efforts in terms of talking with president obama and reassuring
world leaders about the financials of greece? >> greece has had a cries for some months now. the deficit is price what was originally reported. we took some difficult measures and had a package that was passed last week to show the determination of a new government to actually clean up and in that sense, we've talked to the european leaders, the french president, is german chancellor. we're here to talk to the u.s. president. it's not -- greece is doing what it should to be doing to clean up its own mess, however, there's a broader problem here. it's a european problem. it has to do with the euro and it has to do with speculation. these are all issues that interest the u.s. as well. >> let's talk about some of those issues. i want to get to that speculation and talk a little about what's happening on the ground. can you tell me specifically what you're looking for from
president obama? >> i think what has become clear is over and above the fiscal problems that any country has, there are questions of how there is what kind of use we make, people make, of things like cdss, credit derivative swaps and international markets. how opaque they are, nontransparent. how it's not clear who's trading what and how these can push countries to bring their finances under criminal. that's an issue which requires a global response. we're at the end of a financial crisis and we don't seem to have actually taken all the lessons in of that financial crisis and that's very serious and important. >> are you talking about more transparency as it related to derivatives and cds and certain
kinds of swaps? >> more transparency, a ban of naked selling of cdss, for example. we should know who is trading, what they're trading. we're not talking about a complete bank. rules that make the markets more transparent and limit the use that it can be made of these instruments to basically corner countries that beyond what should be done in a normal function of markets. >> aside from specific reform as it relates to the financial services industry, which of course changing the cds transparency would fall under, what kind of financial rescue would you like to see from the u.s. and other nations? >> we're not looking for any financial rescue. we're trying to borrow on international markets on our own terms. it's just that at the moment, we're borrowing at the high
cost. we had a ten-year cost last week, however, with an interest rate exceeding 6%. it's clear we cannot continue borrowing at those rates because we're paying interest what we are gaining terms of very painful wage crafts in the public sector and increases that affect all greek citizens. we're trying to normalize this environment and continue boar reing in international markets without the help of anybody else. >> tell me about that borrowing and how you plan to cut down the heavy debt. >> you know, we have a 12.7% deficit in 2009 and a three-year plan that we have agreed to bring that down to less than 3% by the end of 2012. it's a front loaded approach where in this year, used four percentage points. from next year, have a
deescalation of debt. that's not an easy task. we will do it with specific measures that we have explained to our european partners. they include increases in rates and excess taxes on fuel, cigarettes, tobacco and nominal wage cuts to the public sector. at the same time, we've opened up big reform efforts which will pay off in the following years and which will bring over all the fiscal situation in balance in the next few years. >> and tax increases and budget reform and wage cuts have unnerved the people on the ground as you travel here in washington, you've got people taking to the streets in terms of striking, strikes in the streets of athens right now. how are you going to calm down the social unrest? >> well, i think that it would -- it's totally normal and it's expected of course for these kinds of reactions to --
we are doing something which is difficult and which will affect citizens. would have much preferred to not have cut nominal wages and allow the kind of reforms that we are undergoing to show their affect and we value these kinds of unpopular measures. however, we have to show a clear message of determination and to immediately cut the deficit. now, we have a majority. we have an absolutely parliament majority. we passed these measures a few days ago, so there is no question about not succeeding. and it is very encouraging that opinion polls, even though for when people are asked, do you agree with a wage cut and the answer is obviously no. broadly, they seem to be supporting what we are doing and they understand this is a national crisis. in a national crisis, you have to make difficult decisions, but that's the only way to go forward. >> can you really say this is
not going to work? you said you have the majority in terms of pa lament, but when you look at the measures, vat tax increases and other tax increases, wage cut, spending cuts, what's plan b? what if you don't actually get the proper number in terms of cash to alleviate that $75 billion debt? do you have a plan b? >> well, actually, the kind of measures that were put on the table go over and above the target for this year. the target we've set together with a reduction of four percentage points. the measures on the table go above six percentage points, so we have a cushion to make sure that if there is some problem in one of the measures or if the recovery takes a longer time to appear and therefore tax revenues are not as high as we hoped, there will be other measures to compensate.
there is no question that this target will be made. >> let me bring in david faber. >> thanks. some investors are out there. they look at greece over the last 200 years. the company has been in default on sovereign claims numerous times over that time period. your real wages have doubled over the last ten years versus germany, which have stayed flat. when they hear you talk about your efforts, why should they believe you given the history greece has had? >> it's interesting that they've been following the country for 200 years. greece is a catching up economy and the way you mentioned is because we've had real gdp growth, which has been very high. a few years ago, we were the fastest growing economy in europe. wages, salaries and incomes have been catching up for the rest of europe. now, there have been excesses, increases in the public sector
over and above and i think that's the kind of things that the markets are looking at and seeing the determination to control those. at the end of the day, the biggest deficit that we face and we have said this very clearly, is the credibility deficit. as you say, people often don't believe our data because it was not reflecting reality. i can only say that in five short months, we've shown a determination before. we've taken very important measures. the markets seem to be reacting positively to this. european partners has been a change in attitudes since last week. the greek people seem to be behind us in a very difficult effort. time will tell. >> we want to continue talking with you on the closing bell. i want to talk to you about the banks that have the most
exposure and the ripple effects, but for our live program, we appreciate your time. thanks for joining us. >> thank you. >> sorry, we want to jump in, one more question. >> no worries. >> sir, one question. i know maria's going to be talking more about the banks, but what about goldman sachs? there's been a lot of coverage about the fact that they arranged swaps that enabled greece to mask debt as something else. do you think goldman sachs is partly responsible for the fiscal situation you're in? >> i think that would be stretching it. it's what this particular bank did was a particular operation which at the time, was fully legal and within rules. similar in other countries. unfortunately, this particular operation got a lot of publicity because it came in the middle of greece's financial and fiscal
times. >> thanks very much, sir. we'll see you soon and today on the closing bell at 3:00 p.m. eastern. back to you. >> thanks very much to maria. and next, what mounties and koala bears and camels have in common. >> you throw in camels and you lost me. >> they are dominating in one of those places. >> all right. as we head to the break, here are some of the biggest stock winners this morning.
welcome back. paying back t.a.r.p. remember that one? we seem to have felt that reached its climax and perhaps it did when the big banks manag managed to pay back t.a.r.p. funds at the end of last year, but there are plenty of smaller, regional, mid-sized banks out there that have yet to repay what amounts to about $130 billion or so in t.a.r.p. money. perhaps, now that is beginning, comerica, about 58, $59 billion in assets, raised $800 million through the sale of stock to help it do just that.
comerica told us last night after the bell that it was going hit the equity markets. 22.9 million shares were sold this morning at $35 a share. the offering then positioned comerica to redeem what is $2.25 billion worth of t.a.r.p. money. some of that's been weighing on the bank, by the way, when you look at performance in past quarters in which it had losses. it's been paying dividends and that has not helped things at all as comerica battles through what so many regional banks are dealing with. about 40% of comerica's loans, not that long ago, were not midwest region, but this morning, it succeeds in getting
that deal done. you can see what the stock has done in the recent months and over the last year. you can also take a look. well, actually, what is that? that's just the last week. you know what i mean. it was much lower, although it has not had the percentage move we saw in the likes of bank or america or citi, which you heard some analysts talking about earlier on the show. we'll see when they manage to redeem the t.a.r.p. preferred. a year ago, the prospect of banks being able to issue lots of equity to repay t.a.r.p. would have been something few would imagine. the stress test took place in the spring of last year and they gave people a score card for feeling more confident. that may have at least aided the ability of banks to start to hit the capital markets for the offerings that would ultimately raise the capital, put them in a perhaps surplus capital position in which they were able to repay the u.s. government.
there's a look, by the way. the bounce off the bottom from '09 through 2010. erin, back to you. >> thank you. next, canada's economy growing at its fastest pace in a decade. australia's economy creating jobs. two bright spots in the economy. if you had to bet on just one, which would it be? the one on the top or the bottom of the world? you can argue which is at the top and bottom. plus, why the baltic drives higher in one week. may not mean what it used to.
here's where i stand. in a world where we have global growth, both economies are highly geared. i believe australia is the more geared economy. canada, a better story, more diversified economy, is one certainly that gives me economies. fertilizers, potash, those are names we love, but let's listen to a couple of guys who do this in each country. let the battle begin. ted, let's go to you first. give me the story why canada outperforms aus trait area as the better economy. ted, this is tim. which economy is a better play here? canada, where you live. >> i'm not hearing it.
>> okay. let's go to james. let's talk about australia and exposure to china. >> we like austral because of the exposure in general. we think that's the driver for the growth at this point and you know, it's better than having to u.s. as your source of stimulus. we seem to be limping along here where as china and southeast asia are doing great. the stocks that we look are plays on that. >> which stocks would those be and are we relying solely on china? >> it's a broader economy and their unemployment is low by worldwide standards. their economy growing in its own right. it's more than just metals and
mining. it's a reasonably broad-based economy. we like bhp as a play, but also anz, australian new zealand bank because of its exposure to other parts of southeast asia. they're shooting for 20% in southeast asia. >> two things that concern me about australia. rates are going higher and i think there's heavy reliance to china. canada on the other hand, has a more diverse economy, lower rates, the ability to generate themselves out of a crisis time with more stimulus. why is this better? >> i think the higher rates in australia reflect the issue that they're growing about the pace that the reserve bank of australia, their central bank wants, which is about 3% gdp growth and maybe 2.5% inflation.
they're further along on that transition to a more normal interest rate transition than we are. >> let's go to ted. talk about canada and argue this case why this is a better story than australia from a diversified economy's perspective. >> both have a lot of similarities. the benefits of canada, we have more diversity in a sense. we have not just very strong banks in the financial center, we have strong, world class insurance companies. we have strong resource plays on the energy side, a secular, long-term growth area. canada has very large reserves going forward. >> what are you best plays? how do we play canada? >> i would do a diversified play through a selection of some of our strong banks, fertilizer companies, potash. you've got the insurance companies. research in motion.
there's a lot of world class companies here. their leverage to sustainable, global growth and not as dependent on the united states. >> a world class hockey team, too. i'm going declare the winner australia. congratulations. gentlemen, thank you very much and you can get more trades around the emerging world every tuesday on "street signs." erin, back to you. coming up, the baltic dry index. once considered the purest leading indicator of economic activity. it's accuracy under attack. we're going to talk about it, coming up. as we head to break, the top performing s&p stocks since the market bottom one year ago. genworth financial is number one. because now you can trade u.s. and foreign stocks online,
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chicago fed president charlie evans says the weak labor market will likely justify easy money policies for quite a while. the baltic dry index. not dry, as you can see. we look at this thing a lot. it's a great run the past week. a gain of 17% over the past five trading days. over the past year, the index has lagged the return of the dow. this is something we've talked quite a bit about. there's a lot of things that play into ship rates. doug, head of maritime research at jeffreys and rita, one of the things people talk about, in a perfect world when it costs more to ship something, it means there's more demand. but we have these new ships coming into the market and that means demand may be increasing, but rates may not go up, right? >> absolutely. i think in the past, what we've seen is roughly we get about two
to 300 ships every year and that kind of keeps the supply side of the equation pretty constant. as a result, the baltic dry index becomes pretty accurate. that should be reflected in the bdi because that's what reflects what's going on, in terms of the shipments. however, at the moment, given the sea change in the supply side of the equation, we are seeing a huge number of ships. in 2009, we had about 250. this year, we're expecting to see over 4,000 ships. it will not reflect changes in demand. >> so, doug, do you share the skepticism and if so, what measure of global ship trade could i use to gauge the economy? >> i think that's right, erin.
when ever you look at what the bdi reflects, it simply reflects charter rates or earnings across the variety of asset classes. and so, the demand for those commodities is one part of the equation, but so is the supply of new ships. you have to see how those match up. even in the past, periods of underlying commodity destocking and restocking. it's always been a measure where it can be muddy, but when we're talk about trying to find a measure with the global economy, gobble trade, we tend to focus what's going on on the demand side of the equation. what is poor congestion looking like? we tend to focus on the number of ship securing contracts. >> rita would you agree, we have
to look at it a little more, we have to look more at the nuances? we can't just rely on the bdi? >> absolutely. couldn't agree more with that. simply because if you had, since 1981, as i said, if you had a constant number of ships coming on every year, then yes, you can make a generalization. there are delays. but that has changed the structure and nature of the market, so we need to look at how much trade there is going on in china. how much imports china doing at the moment from brazil from australia. rather than simply looking at the bdi. >> thank you. >> here's a question. who calculates the bdi? >> i don't actually know who owns the index. it's based on date rates paid. >> it seems to me that if they're on their toes, they should come up with a way to
rebalance it. you know, the way -- >> that's a good point. >> the way the dow is refigured and the s&p. kind of seasonally adjust it, if you will, because i'm really lazy. >> have to go look at this port versus that port. good point. coming up, stocks on the move. at&t and united technologies leading the dow right now. as we take a look back at the year in stocks, take a look at exxon mobil, worst performing dow stock over the past year, but the worst mark was good for a gain about 3.25%.
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. welcome back. let's get you up to date. we're now on the plus side and united airlines may have had a little to do with that. corporate travelers are starting to return. unit revenue growth up 17%. that's a big jump. yesterday, u.s. air also made similar comments. we're at new highs at a lot of major airlines. ruby tuesday reporting improvement in third quarter sales and call it the triumph of turbo tax. h and r block down. people are using software programs like turbo tax. back to you. >> all right. thank you. >> i like you, mark. they said don't like me. they heard. don't like me. >> right. anybody out there doesn't like mark.
right. it was the market call heard around the world, however, i'm going step out on a limb here. >> this is the big -- hold on, everyone. we've been waiting for this. >> i think it's obama. i really do. we're really up in this thing. >> locking that one, mark. >> enough, already. since then, stocks have rallied 70%, but the telecom sector only saw an 18% gain. what happened? the worst-performing s&p group, can things turn around? will they? craig mopit is senior analyst at sanford bernstein and eeny, meany, miny mow, david, what's going on with telecom? can it rebound and get back in gear? >> i think we've seen a tremendous amount of uncertain in the telecom services spaces.
the traffic moved wireless. we've also seen investment move wireless and a lot of concerns around the roics in this business as growth has exploded. i think investors will be quite surprised about the resiliency of this space over the next few years. i think you've got some great investment ideas coming up through the course of 2010. i think as you revisit the space in the fall 2010 timeframe, you will get more certainty on the regulatory environment and i think more evidence of revenue resilienliency and cash flow resiliency will ease the dividend concerns. >> so you have some great investment ideas coming up? >> i have theed whys right now. sprint, frankly, we think that's a company learning -- >> i'm sorry, say it again. >> sprint is our top one today as well as at&t. on sprint, we see a company that is getting customers again. we do see a major disconnect
between investors' perception of the cost structure of this company relative to the opportunities going forward to integrate their business more effectively with technology and a major catalyst there. it should be number one. >> craig, two quick questions. one is how much money do they need to spend? the u.s. wireless companies, to have their networks be as consistent and as able to handle the data onslaught as, say, those in europe or asia? >> it's a good question. the short answer is we don't know. there are still lots of competing theories for why we're seeing so much congestion. just in the last couple of months some of the speculation has shifted to the idea that devices like the iphone, for example, are actually doing so much signaling in order to save battery life, that is turning themselves on and off that it's that as much as the sheer usage of data causing the network problems. that would suggest maybe a little bit less of a remedial requirement than we would have thought. it's still a big number, and i think the point that was just made is an important one.
the revenues for wireless data are growing at a tiny fraction of the rate of the usage of wireless data, so there is a very real concern here that what we're seeing is a big step down on the return of invested capital on this industry. >> it brings us to the point of dividends and other reasons people buy them. if we have the giant number, maybe not as giant as some thought, but a giant number on investment and diminishing capital, do we start to look at these companies different in terms of yield? >> well, i think that it's fair to say that the dividends are safe for the time being. i think you look out at these companies, though, and these dividends are relatively high, but these are negative growth companies without particularly good prospects. i'm talking about the telcos now, without good prospects and returning to growth, so while we've moved away from short recommendations for most of 2009 to neutral recommendations, i
all right. on this one-year anniversary of the haines bottom, we asked whether you think the dow will top 11,000 this year and the s&p 1200? our viewers are optimistic. 60% say we'll pass both. >> wow! >> good for them. >> only 5% say it it won't. we have to get to "six in 60." erin gets three, i get three. i think i'll start this one. cheesecake factory, downgraded to neutral from buy. warnaco group upgraded from outperform to neutral at credit suisse. the firm raising its price target to 56 from 45. toyota, they slammed on the brakes on that one at stand pointe research downgrading it to hold from buy.
>> united technologies upgraded to outperform from neutral. the stock up 1.5%. and from settetiing strong reve commissions there. comerica, downgraded it at bmo. it's down 1.6%. we have extra time, but we're going to use it. are you sending out a resume any sime soon? not you, mark. >> i haven't sent a resume out in a long time. >> check these out. >> your resume on a cookie. >> yes, on a giant -- created by a massachusetts cakery called cake for occasions. up to $13 they transfer it on to edible sugar paper to get an 8 by 11 nut-free sugar cookie which we got. i want to note that they also gave us business cards. haines ate both of them.